Mt. Gox repayments will only cause Bitcoin sell pressure among ‘paper hands’ — Analyst

The incoming repayments from the defunct Mt. Gox exchange will only cause short-term bitcoin selling pressure among the weakest holders.

Mt. Gox’s cold wallet transferred 140,000 Bitcoin ( BTC ) worth over $9 billion within three hours on July 16, signaling asset consolidation ahead of the repayments.

However, the over $9 billion worth of repayments will only result in Bitcoin selling among the holders with the weakest conviction, also known as "paper hands" in crypto slang.

Therefore, Mt. Gox repayments will only cause short-term Bitcoin volatility, according to popular on-chain analyst ZachXBT, who wrote in a July 16 X post:

“I expect CT (read as the softest of the men, soyest of soy) to react to the first few 5k BTC+ transfers to CEX. Transfers on-chain (shuffle of coins within wallets) do fuck all.”

Large amounts of sell pressure flooding the market can have a significant impact on Bitcoin's price, which has recently recovered from an over one-month downtrend.

Notably, Bitcoin price was only able to find its local bottom and stage a recovery after the German government ran out of Bitcoin to sell .

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Bitcoin long opportunity will come after Mt. Gox volatility

The real opportunity to get long exposure for Bitcoin will come after the market has digested the Mt. Gox repayments, similar to the scenario following the German government’s Bitcoin selling .

ZachXBT expects the end of the repayments to be a good buying opportunity for long-term holders. The analyst wrote:

“Just like with Germany transfers, eventually, they will have no price impact. That's when I hope to long.”

Meanwhile, Bitcoin price rose over 10.6% in the week leading up to 11:02 am UTC to trade at $63,464, recovering from an over four-month low of $53,550, according to Bitstamp data .

Kraken Exchange was among the first exchanges to confirm receiving the funds from the Mt. Gox Trustee. The exchange said it will start redistributing the Bitcoin and Bitcoin Cash ( BCH ) to creditors in the next seven to 14 days, according to an email sent to users on July 16.

Related: Bitcoin and Ether lead $17.8B crypto inflows

Will 99% of Mt. Gox Bitcoin be sold?

However, most of Mt. Gox’s creditors could be looking to sell their Bitcoin, which has increased in value by over 8,500% in the 10 years since the exchange’s collapse.

Up to 99% of the creditors could be looking to sell their BTC from the defunct exchange, according to finance analyst Jacob King.

The analyst wrote in a July 4 X post :

“99% of those on Mt. Gox are going to sell their coins the moment they get it. Imagine billions worth of Bitcoin all being dumped gradually over the next several weeks. There is no way to spin this to be bullish, or news that could offset this.”

More than $9.4 billion worth of Bitcoin is owed to approximately 127,000 Mt. Gox creditors who have been waiting for over 10 years to recover their funds.

Magazine: Mt Gox not dumping Bitcoin just yet, Hong Kong boots out crypto exchanges: Asia Express